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Steam’s 20% Price Increase in Serbia (and Gamedev)

Valve announced that certain countries will see a price increase on the Steam store to comply with tax laws in those respective areas. One of those areas is Serbia, which will see a whooping 20% to get in line with the country’s PDV tax, which is similar to the EU’s VAT. One of the things that isn’t similar to the EU is the average salary in Serbia, which was around 370 euros last year (the minimum wage is around 180 euros). Serbia is also priced on Steam the same way as Western Europe, so there’s no cheaper games to even out the low wages as is the case in countries like Russia.

The PDV tax has been a thing in Serbia for years now and applies to all physical goods as well, so this is likely more that the country is catching up with the IT sector and updating things to apply to digital goods as well. This post isn’t really meant to point fingers at anyone over this decision, but rather to reflect a bit on what implications this has for Serbian gamers and, more importantly, Serbian game developers. But first, some necessary context!

My first gaming platform was a Sega Master System 2 in 1991. I got my second one in 2002 when my parents bought me a PC. I pirated games until around 2012. Now I work in game development. It’s safe to say that without piracy and easy access to video games, I would be pursuing a career I was less fond of. Piracy was more or less a state of things for the longest time; when your salary can barely cover basic necessities, you can’t really pay the asking price of an original game. Piracy made Mega Drive and SNES games readily available. Piracy created a boom in people playing Playstation 1 games. Piracy gave people functioning copies of Windows and games. Piracy made it possible for the country to have print games media. You’re probably wondering how people could not afford games when they could afford consoles or PCs that might cost in the thousands? Mostly by sellers offering crazy 3 year monthly installments and other arrangements. When I say people couldn’t afford legal copies of games, I genuinely mean it.

Then Steam happened. Its sales and offers and (in very rare occasions) special prices for Serbia meant that you could decide not to go out that week and instead buy a new game. The convenience and satisfaction of owning a game and paying a developer was good enough at that point. It was also a slow process, that usually went through “I only pay for online games”, followed by “I’ll only support indies” and finally “I’ll buy this fully-priced game on a big sale in a few months”. Of course, piracy is still big among Serbian gamers, but it’s much lower than it was before, especially for the more tech-savvy people. This availability of new games for a country that usually couldn’t afford it has surely affected the gamedev scene. I don’t mean big companies like Nordeus or Eipix, but smaller developers that got their games on Steam, like Switchcars and the highly-anticipated Scorn.

You need to play games to make games. You need to keep track of trends in this competitive industry. You need to play the good, bad, quirky and strange. But it’s not just that, you also need to socialize and network often. Imagine going to a conference and meeting developers whose games you enjoyed, but you never bought their game? You obviously won’t tell them this, especially because the West likes to condemn any form of piracy without regard to context. I once met Gamma Ray, a band I loved to listen to, and they went on a rant with someone over how pirates were stealing from them and how they’re the worst. Imagine how a kid like me felt after that, just because I had no way of buying music at the time? (Spoiler: very shit.)

What this increase will probably lead to is people playing less games, or at least purchasing less games legally. This is going under the assumption that competitors like GOG, itch.io, Origin and so on will eventually have to comply with the same rules as Steam. In the grand scheme of things, it’s another layer of garbage the Serbian gamedev community has to go through in addition to: importing costs, online payment hoops and hurdles (the country only got Paypal a few years ago by the way), obtuse laws and taxes and general disconnect from the rest of the industry (because visiting conferences outside of the Balkans is a massive undertaking). It would be nice if Steam would actually bump Serbia down into a different region, or if the additional 20% were absorbed into the current prices instead of raising them. But that’s unlikely to happen, as Serbia is already a tiny market, so it’s probably too much logistical hassle to bother. I mean, it took them 4 years to remove “Yugoslavia” and add “Serbia” as your profile location.